Close the Loophole

By Karen Roorda, San Francisco | 4/01/2021

Regarding “A vulnerable revenue system” (Insight, March 29): Our “vulnerable revenue system” is a direct result of Proposition 13, the 1978 initiative that not only froze assessments on residential property until it changed hands, but also froze assessment on large commercial properties, some of which never change hands. Your editorial wisely called for a fix to our outdated tax system but did not specify what that fix should be.

The Schools and Communities First initiative scheduled to be on the November ballot would regularly reassess commercial property over $3 million while maintaining tax protections for residential property. This would provide California with a stable and sizable source of revenue — approximately $12 billion annually.

For those who fear this will be bad for business in California, consider that most businesses already pay property taxes near fair market rate. However, a few corporations whose property never changes hands are free riding. Chevron alone pockets $100 million annually because it is paying property taxes based on what its land was worth in the 1970s. California has the opportunity to close this corporate tax loophole and restore critical funding to our schools and communities at a time when it is needed more than ever.